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Livestrong and Apple Companies Ethical Dilemmas Term Paper

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Updated: Apr 9th, 2020

Not-For-Profit Organization: Livestrong (Livestrong.org)

Company Profile

Lance Armstrong founded the charity organization in 1997 after he was diagnosed with cancer at the age of 25 years old. Since then, Livestrong has worked had to enhance health and lives of individuals affected with cancer. Livestrong started as a small group striving to raise funds for cancer treatment. It recognized the impact of the diseases on affected persons (LIVESTRONG Foundation, 2015). Today, Livestrong support for cancer patients has grown and reached most parts of the world.

Ethical Dilemma Faced

Livestrong Foundation used the funds for charity mission to lobby for Armstrong at the Capitol Hill against cheating. The USADA (the United States Anti-Doping Agency) probe against Lance Armstrong was not in any way related to the work of the Foundation and its mission for cancer patients and their families (Red & O’keeffe, 2012).

In this case, Livestrong was directly involved in the lobbying attempts. As a result, ethical questions were raised, and many critics argued that these lobbying efforts were not ethically acceptable practices. The lobbying went against the intent of many donors who provide their funds for a charity mission.

Some donors believed that Livestrong was not transparent, specifically on its relationship with the founder. The revelation that Livestrong hired Patton Boggs with the charity money to lobby for Lance Armstrong against USADA caused fury among most donors.

In this case, several donors pointed out that the charity lacked transparency, fairness, accountability and proper financial management. Any further attempts to present positive aspects of financial management of the organization did not assuage most donors.

The Response to the Ethical Dilemma

Livestrong responded to the ethical dilemma by stressing that its financial management, accountability, and transparency were beyond reproach. These explanations, however, did not meet expectations of many donors who believed that the charity ought to be more transparent and accountable. In addition, donors expressed their concerns that the difference between Lance Armstrong and Livestrong was becoming difficult to notice. For instance, Lance charged substantial fees for appearing at some events for charity ride. This situation also explained the complex relationship between Lance and Livestrong.

Lance resigned as the chairman of the Foundation after admitting the cheating claims. Previously, Livestrong had relied on Lance Armstrong and his story to promote the charity mission. The Foundation is now facing tough times, but has decided to rebrand and use other people who have benefited from the program.

For the past decades, Lance Armstrong has been the face of the Foundation, but this must change going forward. It is necessary for the Foundation to continue working with other partners and strengthen its mission without the founder.

For Profit Organization: Apple, Inc.

Company Profile

Apple, Inc. designs, makes and markets mobile communication devices, computers, digital music players and sells other various related software and peripheral pieces of hardware components, services and networking solutions alongside third party products and services (Apple, Inc., 2013).

The company’s products and services include “iPhone, iPad, iPod, Mac, iPod, Apple TV, the iOS and OS X operating systems, iCloud, accessories, service and support offerings” (Apple, Inc., 2013). Apple Inc also sells various digital contents and apps on its different platforms such as the “iTunes Store, App Store, iBooks Store, and Mac App Store” (Apple, Inc., 2013).

Foxconn is the “largest supplier of components used for manufacturing Apple products” (Hinks, 2012, p. 1). The company is located in China. It has grown significantly, but under questionable labor practices and poor compensations below basic needs.

Ethical Dilemma Faced

Tim Cook faced the most critical ethical dilemma shortly after taking over the world’s technology giant firm, recognized for its innovative and creative products (Hinks, 2012).

The problem is not necessarily with Apple but with one of its major suppliers, Foxconn, a company based in China. It is alleged that there are poor working conditions, long hours, poor wages and even deaths related to suicide. Nevertheless, Apple and Foxconn have continued to declare massive profits with minimal improvements to working conditions and compensations.

The Response to the Ethical Dilemma

To enhance ethical practices along its supply chain, Apple has adopted several initiatives. First, Apple became the first technology firm to join the Fair Labor Association to enhance working conditions along its supply chain. Second, the company started to work with Chinese labor rights advocates and environmental associations to enhance external access and monitoring to manufacturing facilities (Hinks, 2012).

In 2012, the FLA conducted an audit to determine changes at Foxconn after the intervention of Apple. It was however established that there were serious and critical areas of non-compliance with the FLA’s Workplace Code of Conduct and the Chinese labor law.

As a result, the FLA concluded that Foxconn required urgent, detailed intervention strategies to protect workers’ health and safety, observe legal working hours, protect employee compensations and introduce new ways of collecting employees’ inputs for decision-making. Critics argue that the improvement at Foxconn should go beyond mere ethical tokenism. Instead, Apple can use Foxconn challenges to make radical changes in the technology industry.

Legal, Social, or Political Outcomes

There was no legal proceeding for the organization based on lobbying at the Capitol Hill because many critics believed that the charity organization did not break any law.

However, for several months, many supporters, according to many media houses, had threatened to pursue legal action against Livestrong because they believed that Armstrong and Livestrong misled them. None of these supporters or individuals has gone to court against the organization so far. Hence, there is no pending legal action against Livestrong after using donations to lobby for its founder.

Political ramifications were evident because of the involvement of some lawmakers. Most of these politicians declined to comment following the USADA revelation.

Socially, Livestrong suffered some major drawbacks. Many donors noted that it was inappropriate for the organization to use their money to lobby against the USADA. This could have affected the donation.

For Lance, many companies such as Nike, Trek Bicycles, Oakley and Radio Shack noted that they would end the relationships. However, most of these organized maintained that they would continue to support Livestrong. Lance Armstrong must evaluate what the future holds for him.

The Foundation faces a significant challenge and a myriad of uncertainties without him. It is noteworthy that Livestrong Foundation has continued to receive increased donations since the controversy surrounding Armstrong started. The Foundation has been synonymous with its founder, the brand and name. Now, however, Livestrong Foundation must find a way to distance itself from the cyclist, the damaged reputation because of lobbying and strive to stay sustainable.

To the Foundation, the media have blown the issue of Lance Armstrong and Livestrong out of proportion. In most instances, reporters ask hypothetical questions about the future of Livestrong. In addition, others have questioned whether it is important to invest in clinical research for cancer other than fund the Foundation.

Livestrong Foundation has stood out in the manner it responded to the crisis. It has continuously focused on cancer and cancer survivors instead of Armstrong to strengthen its mission. Through this approach, it aims to eliminate negative publicity and concentrates on its achievements as one of the best cancer not-for-profit organizations in the US. The Foundation asserts its expertise on cancer issues, delivery of reliable information, transparency and effective governance, as well as high standards of accountability.

Livestrong believes in innovation and entrepreneurial spirit to survive and assist many people affected by cancer. It demands that the media should be fair in coverage of the issue rather than focusing on negative publicity only.

The interventions by Apple have led to limited or no legal suit against Foxconn. However, politicians, on several occasions, have intervened to coax most workers who threaten suicide by jumping from the top roof of their factory. Moreover, governments have also engaged their related agencies to probe the issue.

These interventions have strived to improve socio-economic conditions of many workers at Foxconn. While these improvements have been lauded as significant, some audit reports have noted that old labor practices are common and get worse during busy sessions. Consequently, some critics have called on consumers to exert pressure on Apple and Foxconn to improve labor practices because the FLA has limited resources to meet current demands.

Following the outcry on working conditions at Foxconn, working conditions have improved, according the Fair Labor Association. Both companies have continued to declare massive profits.

It is imperative to note that Foxconn is unable to sustain such labor practice improvements because recent reports have shown that many workers are exposed to dangerous chemicals that cause leukemia at its factories. Thus, for Foxconn and not Apple, the issue of ethics occurs as unwanted intrusion in the focus on revenue growth and success.

Apple is specifically on the spotlight because of its luxurious products. Hence, working conditions of the workers at Foxconn have attracted large international attentions with Apple cited as the most responsible party. There has been constant negative media coverage of working condition at Apple’s largest supplier. The coverage could influence consumers about Apple’s products and perhaps hurt its touted economic success.

The relationship between Apple and Ethics could be complex. One may not understand whether Apple is promoting such practices. Of course, not because Apple has consistently maintained that its suppliers must meet stringent labor practices and safety standards for exposure to chemicals. Conversely, Foxconn is notorious for its poor working conditions, broken legal overtime rules and is now the focus of government labor agencies involved, human rights and labor organizations. These organizations want Apple to initiate labor reforms at Foxconn.

Apple has consistently responded that it requires all suppliers to meet fair labor practices and conform to safety standards for chemical exposure regulations for the US and other countries in which its suppliers are based. It is imperative to note that these complaints against Apple and Foxconn add to other long lists of complaints of a similar nature. It shows that Foxconn improvements have not met the expected standards and, therefore, it must continuously strive to improve practices.

Personal Reflections on Ethical Actions

Livestrong Foundation responses have been to distance itself from the cyclist as much as possible. Lance Armstrong had to resign as the chairman of the Foundation following his admission to doping claims and lobbying against USADA (Red & O’keeffe, 2012).

In addition, the Foundation insisted that its processes were transparent, accountable and maintained high standards of governance. In this regard, one can argue that Livestrong Foundation responded in morally responsible way by distancing itself from Lance Armstrong, focusing on other beneficiaries of the Foundation, looking for innovative ways to drive its mission and promoting its noble agenda.

Livestrong Foundation created the ethical dilemma by using donations to lobby for Lance against the USADA. Many have argued that one could not exactly tell the difference between Lance Armstrong and the Foundation. For instance, it was difficult to determine whether Lance was acting on his personal behalf or on behalf of the Foundation, specifically when he charged fees to appear on charity events. Thus, unforeseen forces were not responsible for the ethical dilemma at Livestrong Foundation.

Although critics and some donors have faulted the Foundation for acting in an unethical manner, the Foundation’s response to the ethical dilemma was considered good. In fact, some of its major donors, including Nike have cut ties with Lance Armstrong, but they have maintained that they will continue to support the fight against cancer through the Foundation. The Foundation must continue to work with other donors and promote its mission without the founder.

Given the nature of the relationship between Lance Armstrong and its Foundation, it is difficult to determine who was responsible for the ethical dilemma. Nevertheless, the Foundation has been held responsible for a lack of transparency, poor financial management and low standards of governance. Its leadership must disassociate with Lance and avoid engaging in lobbying activities, which do not have any relationships with cancer, cancer patients or their families.

Apple responded in a morally responsible manner to ethical dilemma created by Foxconn. Apple, for instance, has insisted that all its suppliers must maintain fair labor practices and abide by labor laws of respective countries (Parboteeah & Kapp, 2008).

In addition, it was the first technology company to join the Fair Labor Association to ensure that workers at its supply chain are protected from exploitation. However, Foxconn has poorly implemented recommendations made by the FLA. Consequently, the company has made minimal progress in compensation, observing legal working hours and protection of workers from harmful chemicals among others.

Although Apple is not directly responsible for ethical dilemma at Foxconn, many critics have associated the situation with Apple while Foxconn is directly responsible for the issue. Foxconn has failed to improve its working conditions and observe standard labor laws and practices provided by the US and Chinese labor agencies.

Apple has not done enough to resolve the issue at Foxconn. It is now the responsibility of Foxconn to implement the recommendations. It is nearly impossible for Apple to cut ties with its largest supplier. The company, however, has an option to influence change at the technology industry by insisting that Foxconn must meet all labor and worker protection requirements. In addition, Apple can lobby other technology firms such as Samsung, Dell and Nokia among others to ensure that Foxconn meet the expected standards.

Foxconn is directly responsible for this ethical issue at its Chinese factories. Foxconn can fix its ethical challenges by adhering to both the US and Chinese labor laws and safety standards. While it had made some progresses, recent audits have revealed that some workers still face critical challenges (Kenny, 2014).

Critique based on the two theories

The ethical dilemma of Livestrong reveals egoism at the company. The Foundation was engaged in selfish drive to save its founder. In fact, this was purely an act of benefiting Lance Armstrong and not the noble mission of fighting cancer.

By acting in the best interest of Lance Armstrong, the Foundation failed to meet its core mission of fighting cancer, and, therefore, this action was not in the best interest of cancer patients or their families. Conversely, the Foundation shows that there is a blurred line between acts of self-interests and acting for the betterment of others.

For a charitable organization, utilitarianism should guide their mission. Utilitarianism goes beyond selfish human desires (Lurie & Albin, 2007). Through donors who act purely to improve the lives of cancer patients, the Foundation should also adopt a similar approach to promote its mission.

The mission of the Foundation was to focus on individuals who were really in need of help because of cancer (Beekun, Stedham, Westerman, & Yamamura, 2010). However, by focusing on Lance Armstrong, it showed that self-interests could sometimes override human suffering and acts of selflessness. Hence, it is difficult to understand the ideal relationship between pursuit of self-interests and selflessness.

The ethical dilemma at Livestrong Foundation shows that it could be difficult to run ethical organizations. Generally, individuals have diverse views on moral obligations. Thus, issues considered morally upright for an individual may not reflect the same for another person.

The Foundation can only meet the needs of its stakeholders by focusing on moral principles and ethical standards that guide its operations. Furthermore, leadership must also demonstrate that it has no links with Lance Armstrong and must rely on other individuals to promote its course (Marques, 2012).

The case of Apple and Foxconn demonstrate a classical example of egoism. For-profit organizations are purely driven by their self-interests and not interests of their workers. The pursuit of profits at minimal costs is their core agenda.

Foxconn and Apple cannot purely act in the interests of their employees. Hence, they should adopt deontology to understand how right their actions are against their workers (Rossy, 2011). Foxconn and Apple should understand their moral obligations and duties, as well as labor laws, which regulate those obligations. Consequently, they would be able to make the best moral choices.

Companies can balance their relationships between profits and bad actions to protect their workers. In this manner, they are developing ideal relationships with all stakeholders as they strive to run ethical business. In addition, they would create competitive edge and contribute to the overall good of customers and workers (Simha & Cullen, 2012).

This requires Foxconn and Apple to follow their moral duties and behave morally toward their workers and employees. Immoral behaviors arise when they fail to follow these duties. In addition, they must also demonstrate correct motivations. Apple and Foxconn must determine their roles and obligations objectively and absolutely to protect their employees.

References

Apple, Inc. (2013). 10-K Annual Reports 2013.

Beekun, R. I., Stedham, Y., Westerman, J. W., & Yamamura, J. H. (2010). Effects of justice and utilitarianism on ethical decision making: a cross-cultural examination of gender similarities and differences. Business Ethics: A European Review, 19(4), 309-325. doi: 10.1111/j.1467-8608.2010.01600.x.

Hinks, P. (2012). .

Kenny, J. (2014). Apple’s new labor complaint involves toxic chemicals. LIVESTRONG Foundation. (2015). Who We Are. Retrieved from http://www.livestrong.org/who-we-are/our-history/

Lurie, Y., & Albin, R. (2007). Moral Dilemmas in Business Ethics: From Decision Procedures to Edifying Perspectives. Journal of Business Ethics, 71(2), 195-207.

Marques, J. (2012). Walking the Talk. Journal for Quality & Participation, 35(2), 4-7.

Parboteeah, K., & Kapp, E. (2008). Ethical Climates and Workplace Safety Behaviors: An Empirical Investigation. Journal of Business Ethics, 80(3), 515-529.

Red, C., & O’keeffe, M. (2012, October 23). Tainted cyclist Lance Armstrong had Livestrong charity lobby on Capitol Hill on his behalf. New York Daily News. Retrieved from http://www.nydailynews.com/sports/more-sports/wheel-dubious-lance-charity-raises-ethical-flags-article-1.1190810

Rossy, G. L. (2011). Five questions for addressing ethical dilemmas. Strategy & Leadership,39(6), 35-42.

Simha, A., & Cullen, J. B. (2012). Ethical Climates and Their Effects on Organizational Outcomes: Implications From the Past and Prophecies for the Future. Academy of Management Perspectives, 26(4), 20-34. doi: 10.5465/amp.2011.0156.

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IvyPanda. 2020. "Livestrong and Apple Companies Ethical Dilemmas." April 9, 2020. https://ivypanda.com/essays/livestrong-and-apple-companies-ethical-dilemmas/.

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